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The SB 32 Scoping Plan Update, Waivers, and ZEVs

Garrett Lenahan

This post is part of the Environmental Law Review Syndicate (ELRS).

I. Scoping Plan Background

Two prominent pieces of Californian legislation that seek to address climate change are Assembly Bill 32 ("AB 32") and Senate Bill 32 ("SB 32"). AB 32 required California to reduce its greenhouse gas ("GHG") emissions to the 1990 level by 2020. It tasked the Air Resources Board with creating a Scoping Plan for reaching those levels. The original scoping plan contained a range of programs that would reduce GHG emissions from cars, trucks, fuels, industry, and electricity generation. SB 32 now requires the Air Resources Board to ensure that statewide GHG emissions are reduced to 40 percent below the 1990 level by 2030. The proposed Scoping Plan Update builds on the programs from the original Scoping Plan under AB 32 and includes some new ones.[1] Programs under the Proposed Scoping Plan include the Cap and Trade Regulation, the Low Carbon Fuel Standard, the Renewable Portfolio Standard, the Sustainable Community Strategies, the Sustainable Freight Action Plan, and the Mobile Source Strategy, among others.

The proposed Scoping Plan Update is comprehensive and commendable. However, it does lead to a few potential questions and issues. This paper will address two potential concerns regarding the transportation sector in particular. The transportation sector emits the most greenhouse gases of any economic sector in the state, so it is vital to reaching the SB 32 goal.[2] The first concern is whether the new administration under President Trump will revoke California's waiver to regulate tailpipe emissions and how that affects the Scoping Plan. The second issue about the Scoping Plan is whether California will be able to install adequate infrastructure across the state to accommodate the increased number of zero emission vehicles.

II. Vulnerability of CA's Waiver

The statutory text of the Clean Air Act grants California alone the ability to ask the EPA administrator for a waiver to regulate pollution from vehicle tailpipes more strictly than the federal government.[3] Ordinarily, states are prohibited from regulating vehicle emissions. When California sought to regulate greenhouse gases from vehicles, the Obama administration granted the waiver in a 2009 deal with the auto industry that established national standards on GHG emissions from vehicles.[4] As part of the deal, California harmonized its rules for GHGs with the federal government.

In 2013, California received another waiver to regulate GHG emissions for model year vehicles 2017-2025. However, there are indications that the Trump administration may roll back the national standards and also revoke California's waiver to regulate GHGs from tailpipes.[5] The California Air Resources Board nonetheless decided to move forward with its model year 2022-2025 standards for GHGs.[6] If the Trump administration revokes California's waiver, then California will be unable to regulate GHGs from vehicles because it will be federally preempted.

California will inevitably sue if the EPA attempts to revoke its waiver. Those ensuing court battles will be lengthy and costly. There is no actual language or mechanism in the Clean Air Act mentioning the revocation of a waiver. Section 209(b) of the Clean Air Act states that the EPA Administrator "shall waive" federal preemption "if the State determines that the State standards will be, in the aggregate, at least as protective of public health and welfare."[7] Nonetheless, there are three exceptions where "no such waiver shall be granted if the Administrator finds that - (A) the determination of the State is arbitrary and capricious, (B) such State does not need such State standards to meet compelling and extraordinary conditions, or (C) such State standards and accompanying enforcement procedures are not consistent with section 7521(a) of this title."[8]

If the EPA attempts to revoke the waiver, California will argue that the burden is on those challenging California's waiver to show that California has not satisfied the statutory criteria.[9] In both the 2009 waiver grant and the 2013 waiver grant, the EPA stated: "Congress recognized that California could serve as a pioneer and a laboratory for the nation in setting new motor vehicle emission standards. Congress intentionally structured this waiver provision to restrict and limit EPA’s ability to deny a waiver, and did this to ensure that California had broad discretion in selecting the means it determined best to protect the health and welfare of its citizens."[10] The EPA must grant the waiver unless one of the three exceptions is met. According to the EPA in the 2013 waiver, this "reversal of the normal statutory structure embodies and is consistent with the congressional intent of providing deference to California to maintain its own new motor vehicle emissions program." Furthermore, the EPA stated that "the legislative history indicates Congress quite intentionally restricted and limited EPA’s review of California’s standards, and its express legislative intent was to provide the broadest possible discretion [to California] in selecting the best means to protect the health of its citizens and the public welfare."[11] Thus, if the new EPA administration aims to revoke California's waiver, it will have to overcome this strong presumption in favor of California. Moreover, the Administrator has a burden to act "reasonably" when deciding whether to grant a waiver.[12]

California may argue that because there is no precedent or established procedure for revoking a waiver, the EPA should not be able to revoke its GHG waiver for vehicles. If the EPA did try to revoke the waiver, it would have to go through a rulemaking process to do so. Public notice and comment periods take significant time and would inevitably be followed by a lawsuit. Moreover, EPA would likely have to overcome its previous statements in the record supporting California's waiver. Revoking a waiver would depart from EPA's historical practice. Since the Clean Air Act was amended, the EPA has only denied one California waiver request. That denial was in 2008 and the EPA reversed course one year later and granted the waiver. In the 2009 waiver, the EPA claimed that the denial featured an incorrect interpretation of Section 209(b)(1). The Administrator declared that the denial was a substantial departure from the administration's "longstanding interpretation of the Clean Air Act's waiver provision and EPA's history of granting waivers to California for its new motor vehicle emissions program."[13]

Conversely, the EPA may argue that California does not need stricter motor vehicle standards for GHGs to meet compelling and extraordinary conditions under 209(b)(1)(B). EPA would then revert back to the reasoning from the 2008 waiver denial. There, EPA concluded that California's GHG standards should be reviewed separately from the rest of its motor vehicle emission control program and that California could only promulgate standards that address local or regional pollution problems.[14] However, this reasoning was rejected in more recent waivers. In the 2013 waiver grant, the EPA said the correct interpretation was to see if California has compelling and extraordinary conditions giving rise to a need for its own motor vehicle emissions program.[15] It did not require a separate analysis for the GHG standards. The Administrator also concluded in 2009: "I have evaluated the comments received and evidence in the record and have determined that the opponents of the waiver have not met their burden in demonstrating why evidence such as the impacts of climate change on existing ozone conditions in California along with the cumulative impacts identified by proponents of the waiver (e.g., impacts on snow melt and water resources and agricultural water supply, wildfires, coastal habitats, ecosystems, etc.) is not compelling and extraordinary".[16] Both the 2009 waiver and the 2013 waiver discussed the compelling and extraordinary conditions that merit state standards. In particular, the 2009 waiver described: "not only are California’s conditions ‘unique and arguably more severe’ (e.g. temperature impacts from global warming are more certain for states like California) but also that no other state faces the combination of ozone exacerbation, wildfire emission’s contributions, water system and coast system impacts and other impacts faced by California."[17] California will have a strong argument, but some of the reasons for granting the waivers were largely based on agency interpretation. This leaves some wiggle room for the new administration. Although, it still has to overcome the large presumption of deference to California.

If California does lose its GHG waiver, the state may have to shift its policies under its Scoping Plan Update to compensate for that. It may need to adjust the Scoping Plan Update to create greater reductions through its other programs in order to achieve the mandated levels of reductions under SB 32. One option is focusing on other areas of transportation. In the transportation sector, the Low Carbon Fuel Standards and Zero Emission Vehicle ("ZEV") requirements as written will likely not be enough to compensate for less stringent GHG standards for vehicles. They may need to be updated. Another option is to focus on stationary sources. Regardless, the state will likely need to update the Scoping Plan further if the GHG waiver is revoked.

III. ZEV Infrastructure

If California is prohibited from stringently regulating GHG emissions from vehicles, then it will be imperative that the state's zero emissions vehicle efforts are effective under the Proposed Scoping Plan. Transportation is the largest source of emissions in the state, so increasing the number of ZEVs on the road will help mitigate the effects of less stringent fuel economy standards. Regardless of whether California loses the GHG waiver or not, the Proposed Scoping Plan still calls for dramatic increases in ZEV use. Interestingly, the ZEV program in California also requires a waiver. The waiver for the 2018-2025 model year ZEVs is found in the 2013 waiver for California's Advanced Clean Cars program. That is the same waiver that permits California to regulate GHG emissions from vehicles, as discussed above. Consequently, the ZEV program may be vulnerable in the face of the new administration as well. It is unclear if the ZEV waiver would be simultaneously revoked if the EPA revoked the GHG waiver or if the ZEV waiver would remain in place after the GHG waiver was revoked. Assuming the program is not revoked, the expansion of ZEVs in California can help achieve the reduction goals of SB 32.

A key factor in expanding the number of ZEVs on the road is installing enough charging stations throughout the state to adequately accommodate all of the new plug-in electric vehicles ("PEVs") vehicles under the program. Some criticisms of ZEVs include the low ranges and inconvenience. Establishing sufficient infrastructure with charging stations across the state will quell some of those concerns. As charging stations become more abundant and commonplace, consumers will be more inclined to buy them.

Executive Order B-16-2012 and the 2016 ZEV Action Plan call for infrastructure to support 1 million ZEVs by 2020. In particular, the 2016 ZEV Action Plan acknowledges the massive task at hand. It discusses a state analysis of the number of PEV charging stations required to meet ZEV goals. The 2014 analysis found that "upwards of 1,000,000 charge points are needed at homes, workplaces, and public locations by 2020. Excluding home charging, there are approximately 11,000 charge points in California, supporting more than 230,000 PEVs on the road."[18] Moreover, the Scoping Plan Update calls for 4.2 ZEVs on the road by 2030.[19] This massive undertaking will require a significant increase in infrastructure in merely ten years to support the mandated 3.2 million additional ZEVs.

It is important that California effectively utilizes ZEV infrastructure by using renewable energy in PEV charging stations. Senate President pro Tempore Kevin De Leon recently introduced a bill that would require California to generate 100 percent of its electricity from renewable sources by 2045.[20] This ambitious goal would accelerate the state's Renewable Portfolio Standard, which is a program utilized by the Updated Scoping Plan. It would supplement ZEV infrastructure by ensuring that PEVs are utilized most efficiently. Using electricity generated from coal or natural gas still emits greenhouse gases. Using electricity from renewable resources ensures that greenhouse gases are not emitted during the production of the electricity or during the use of the vehicle. Senate President De Leon's bill would simultaneously accelerate the Renewable Portfolio Standard and supplement the expansion of ZEV infrastructure. Both are vital programs under the proposed Scoping Plan Update.

IV. Conclusion

The proposed Scoping Plan Update details numerous programs to reduce California's greenhouse gas emissions across various sectors. The transportation sector is the largest emitter in the state. If the new EPA administration revokes California's waiver to regulate GHG emissions from vehicles and implements a less stringent national standard, then California may have to adapt its Scoping Plan to compensate in other areas. Regardless, the Scoping Plan calls for massive expansion of ZEV infrastructure. This is a major undertaking for the state, with much still to be done. Supplementing this expansion of charging stations and vehicles with 100 percent clean energy makes sense. It will increase the GHG reductions achieved by the ZEV vehicles even further. There is great potential to reduce emissions in the transportation sector, but there are also major questions and concerns facing those reductions. California can effectively progress toward the SB 32 reduction goal if it preserves its vehicle emissions waiver and expands its ZEV infrastructure.